First-half report from Ekornes

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Ekornes’s operating revenues fell by 4.6 per cent in the first half year. However, record order receipts in July give grounds for optim ...

Ekornes’s operating revenues fell by 4.6 per cent in the first half year. However, record order receipts in July give grounds for optimism, and no staffing reductions are planned over and above that which occurs naturally.

Ekornes generated gross operating revenues of NOK 1,433 in the first half of 2011. Operating profit in the first half totalled NOK 204 million, compared with NOK 283 million in the first half of 2010.

The weaker half-year figures derive primarily from the second quarter. Gross operating revenues in the second quarter last year totalled NOK 717 million, compared with NOK 650 million in the second quarter this year. Operating profit in the second quarter last year came to NOK 136 million, while this year’s second-quarter figure was almost halved, ending the period at NOK 70 million. Order receipts in the first half year were 3.5 per cent lower than in the first half last year. Here, too, the decrease came largely in the second quarter.

The second-quarter results can be ascribed to lower output due to lower order receipts, and disturbances in the production flow. In addition, prices for the most important input factors were high during the period.

“Most of our markets have been affected by a high level of uncertainty, particularly with regard to the debt situation in Europe and the USA. In addition, the natural disaster that hit Japan on 11 March undoubtedly contributed to a reduction in consumer spending in the subsequent months,” says CEO Øyvind Tørlen. Sales fell particularly in the markets of Central and Southern Europe and the UK.

“Our second-quarter results were far from satisfactory. But that is behind us now, and our efforts will be devoted to improving our performance in the time ahead,” says Mr Tørlen, who can also point to several positive signals. “Order receipts  in July were 11 per cent up on July last year. In fact they were the highest for any July ever. These powerful fluctuations reflect the deep uncertainty that currently prevails in the markets.”

Ekornes plans to maintain output at 1,650-1,700 seat units per day in the third quarter. This is somewhat lower than in the first quarter, but represents a rise compared with the second quarter, when output averaged 1,600 seat units per day.

“With production at this level we do not need to reduce staffing levels over and above that which occurs naturally. However, we do wish to underline the unusually high level of uncertainty in the markets, which makes it difficult to predict how they will develop in the longer term,” says Mr Tørlen.

For additional information, please contact:

Mr. Øyvind Tørlen, CEO, Ekornes ASA
email: oyvind.torlen@ekornes.no
Mobile: +47 971 11 979

Ekornes ASA is Scandinavia’s largest furniture manufacturer and is headquartered at Ikornnes in the county of Møre and Romsdal, Norway. Ekornes has 1,600 employees worldwide, out of which 1,400 work at the six factories in Norway.